Brave New World

The specifics are irrelevant; suffice to say my curiosity was piqued. Trepidation and skepticism were my allies as I began my journey, stealing onto paths unexplored, tiptoeing in the shadows of giants.

Little did I realize what I had embarked upon.

My background is in neither finance nor mathematics. Life and death is my fortress, the quiet cacophony of the ER.

When the grim reaper loses his mystique and is consigned to the realm of the commonplace, a stark detachment has been born. Stone-cold discipline, emotionless logic, unfaltering action.

You cannot quantify the unquantifiable, nor chain the illogical with shackles of reason.

You cannot model for the vacillations of the fickle.

But recurring patterns occur everywhere.

The pattern recognition ability of the human brain is staggering. More powerful than the most sophisticated supercomputer.

A glance at an ECG (EKG) will give me far more information than a machine-generated analysis.

Every patient is a unique combination of signs and symptoms. But they present a familiar pattern. Sometimes, it takes seconds to recognize these patterns, and endless hours seeking confirmation with investigations of escalating complexity.

In my industry, we practice the art of medicine, and defend ourselves with the science.

The art consisting of judgement, decision and intuition.

After all, what is intuition but subconscious knowledge coming to conscious awareness. The mind is a repository and network of the highest order.

Unerring precision.

Limitless interconnections.

Incalculable depth.

'Art is the imposing of a pattern on experience, and our aesthetic enjoyment is recognition of the pattern.'
Whitehead

Profit is not merely confined to the fiscal and every mistake offers a valuable lesson. It is our duty to search these out unforgivingly and implement them decisively.

Then may we call ourselves progressive.

It is only when lessons are unheeded that a mistake becomes a failure.

And it is the foolish man who replays his mistakes.

This forum was a rare find; Iâm receiving an education nonpareil.

Constructive criticism is a powerful catalyst for change.

âOn the pre-scientific level we hate the very idea that we may be mistaken. So we cling dogmatically to our conjectures, as long as possible. On the scientific level, we systematically search for our mistakesâ¦ Thus on the pre-scientific level, we are often ourselves destroyed, eliminated, with our false theories; we perish with our false theories. On the scientific level, we systematically try to eliminate our false theories â we try to let our false theories die in our stead.â

Her charms are enticing, her perfume intoxicating. Smiling as she leads us blindly down the primrose path. Luring us ever deeper into an institution from which there is no escape.

To stream amidst the fallen and revive, to nurture the greatest gift, whispering a message to humanity.

The promise of a gilded lifeâ¦

Intellectual supremacy.

Earnest self-importance.

Disconnected camaraderie.

This is her reality.

She begets a life of sacrifice and offers little in return.

Taking a thing of beauty and splendour and magnificence, and tainting it with the poison of deception.

Beguiled by Eve to taste of the forbidden fruit. Sweet transmuting to sour, innocence to decadence.

Attraction to repulsion.

Many reach this realization after theyâve crossed the threshold, completely submerged in her underwater world.

Given too much to possibly renege.

To break free and breathe the freshest air.

To let the spirit soar.

Freedom alone substitutes from time to time for the love of material comfort more powerful and more lofty passions; it alone supplies ambition with greater objectives than the acquisition of riches, and creates the light that makes it possible to see and to judge the vices and virtues of mankind.

Iâve been keeping it simple, speculating on direction with puts and calls.

Iâm trading with the trend.

I experimented a little, but now my basic strategy is to look for stocks in a firmly established uptrend, preferably having hit a recent 52 week high. I then look for bullish signals after pullbacks to a significant support level.

Essentially, Iâm looking to ride momentum, and Iâm happy to miss the very start of a move.

I use TC2000, which in my estimation is an outstanding product. Iâm using price, 50 day and 200 day simple moving averages, volume bars, and candlesticks.

Iâve set up stock scans on telechart for stock that have posted a 52 week high over the past week, and another scan for bullish engulfing patterns in uptrending stock. Iâm narrowing the search by looking at stock with a price of $5-$45, and (very recently) institutional ownership > 75%. I want to be following the smart money.

Iâm a very visual person and I believe firmly in gestalt. Seeing the bigger picture.

I initially set the screen to daily charts over a two year period, rapidly skim through the charts (usually a hundred or so), flag the ones that show promise and copy these to a watchlist.

I then go through them more slowly, looking at weekly charts, daily charts and then zoom right in to the last few weeks. Iâve also begun plotting industry comparisons, and will most probably stick to bullish stock in bullish industries.

I end up with a watchlist consisting of approximately ten stock.

The entire process takes but a matter of minutes.

I then further eliminate stock based on my risk management rules.

For every trade, there is an estimated position risk of &#8804; 1.5% total equity, which equates to an estimated risk of ~$1 (including slippage). I would have preferred to stay with 1% but found it too restrictive at this account size.

I am aiming for a risk:reward &#8805; 1:2.

I place GTC conditional market sell orders for every trade, based on the underlying hitting my stop level, which Iâve placed 20 cents or so below most recent support.

The majority of my initial small losses came courtesy of vega. I was buying ATM/OTM options, and getting burnt, even though the underlying often proceeded to make a nice move in my direction (after Iâd taken my 1% loss and closed the position).

So Iâve decided to stick to 75-80 delta ITM calls, expiring at least a month after the expected move. In this way, Iâm planning to minimize vega, theta and gamma, while I get a firm handle on the basics of technical analysis, order execution, stops, money/time management etc.